Interpreting Contracts

Most breach of contract cases have something in common – the contracting parties disagree about the meaning of one or more of the contract’s terms. In determining the meaning of a contract, it is the intention of the parties that controls. But how does the Court determine what the parties intended? Where the contract is written, if it is clear and unambiguous, the language of contract itself determines the intent of the parties. But if the contract is not in writing, or if it is not clear or is ambiguous, then the intent of the parties can be determined by other factors, including their course of performance, negotiations, industry custom and usage, and others. The purpose of contract interpretation is to give legal effect to the parties’ agreement. But if a court is unable to determine the intent of the parties, or determines that the parties had different understandings, then the court will conclude that there is no enforceable agreement at all.